According to a senior GGPL executive, Gwadar GasPort Limited (GGPL) has decided to invest $94.04 million in a ‘virtual pipeline’ to transport imported liquefied natural gas (LNG) to industrial and other private sector consumers at affordable prices via cryogenic bowsers.
Earlier this month, the company which is a joint venture comprising the Pakistan GasPort, Al-Qasim Gas and Jamshoro Joint Venture had applied for the Ogra license. The company document states that it has entered into an agreement with Gwadar International Terminals for utilising Berth 3 at the Gwadar Port to import LNG on a Floating Storage Unit (FSU) of 20,000cbm capacity so that the fuel can be delivered to tankers for onward distribution to the individual customers in the CNG, industrial and housing sectors. The virtual pipeline would have 1,500 bowsers, according to reports.
LNG would be moved onto special purpose trucks for regasification at the site of GGPL’s industrial clients once the obtain the Ogra license and other regulatory approvals, according to sources. The project is believed to be quite flexible and can generate revenue up to be around $1 billion annually.
According to the document, about 54 per cent of the project investment, which includes $24.04m working capital for the purchase of LNG, will be used on lease equipment. It is predicted that the project would deliver 100mmcfd in the first year of the commencement of the operations. The LNG supplies would be increased to 200mmcfd in the second year and 300mmcfd in the third year.
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OGRA had earlier issued provisional licenses to two companies — Daewoo Gas and LNG Easy for the development of virtual pipelines for supply of the fuel via bowsers to off-grid consumers. Daewoo has decided to set up a terminal at Gwadar port for onward distribution by trucks.
Ogra calls this decision a step towards market liberalization to encourage competition in the domestic gas market. It also believes that it would help foster the nation’s economic growth through reliable supply of energy to the consumers.
Singapore-based LNG Easy is reportedly going to invest $200m to develop a system to use trucks and trains to transport the LNG discharged from ships at Port Qasim in Karachi to the off-grid industrial users by August. It will import 350,000 tonnes of LNG a year, and plans to ramp up supplies to 1.2m tonnes in two years, its chief executive officer Yasir Hamid stated.
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However, none of the companies have entered into a binding agreement for utilizing their facilities with the port managers at Gwadar or Karachi.
“We are in the process of appointing Depot Holders on a non-exclusive basis, mainly to provide LNG to the consumers in a radius of about 50km around Karachi,” the GGPL document stated. The company would also supply imported gas to the Gwadar industrial zone when completed